Market Partitioning and the Geometry of the Resource Space

Abstract

This article gives a new explanation for generalist and specialist organizations' coexistence in crowded markets. It addresses organizational ecology's resource‐partitioning theory, which explains market histories with scale economies and crowding, and it shows that some main predictions of this theory can be restated in terms of structural properties of the A'‐dimensional Euclidean space. As resource‐space dimensionality increases, the changing niche configurations open opportunities for specialists. The proposed approach draws upon the sphere‐packing problem in geometry. The model also explains new observations, and its findings apply to a range of crowding and network models in sociology.